AUSTRALIA: S&P Reports Increase In Mortgage Arrears At End Of 2022
S&P is reporting that arrears rose more than usual in December 2022. It noted that for prime mortgages arrears were higher in the early stages of 31-60 days, whereas non-conforming loans were higher across all time categories. Non-conforming loan arrears had begun to rise in July 2022 and have been shifting to more advanced stages since then. (The Australian)
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JGB TECHS: (H3) Cracks to Fresh Lows
- RES 3: 151.13 - High Mar 3
- RES 2: 149.75/150.81 - High Nov 11 / High Aug 5
- RES 1: 147.64/148.79 Low Dec 6 / High Nov 16
- PRICE: 144.50 @ 15:48 GMT Jan 13
- SUP 1: 144.15 - Low Jan 13
- SUP 2: 144.02 - 2.0% Lower Bollinger Band
- SUP 3: 143.88 - 1.0% 10-dma envelope
JGBs persisted within the outright bear cycle to hit a fresh cycle low Thursday at 144.58. This level marks the lowest print for JGB futures since 2014 on the continuation contract. Clearance of the recent support keeps the outlook solidly bearish, with vol band support the next levels to watch at 144.02 and 143.88 below. Key resistance has been defined at 148.79, the Nov 16 high.
JGBS: Will They Or Won’t They?
JGBs are set to start a fresh trading week with speculation re: the impending BoJ monetary policy decision somewhat rife. JGB futures were biased lower in the final overnight session of last week with core global FI on the defensive on the day, but failed to breach their Tokyo base, finishing -15.
- While most expect the Bank to leave its monetary policy settings as they are, many concede there is at least some chance of a further tweak to the BoJ’s YCC settings, with speculation re: that matter intensifying as last week wore on, culminating in Friday’s breach of the upper limit placed on 10-Year JGB yields by the BoJ. It is worth noting that one or two sells-side analysts are of the view that the BoJ will scrap its YCC scheme altogether later this week.
- Note that the BoJ bought a record amount of JGBs on Friday, with the Bank also taking the unorthodox step of pre-announcing unscheduled purchases for today after Friday’s Tokyo close. The Bank did not specify the size or tenors covered by the impending purchases, noting they will be based on prevailing market conditions.
- When it comes to this week’s BoJ decision the Nikkei has flagged that “many in the central bank believe that it should take a wait-and-see approach on policy changes.”
- Outside of the BoJ’s JGB purchases we will also see the latest PPI data on Monday, with any upside surprise having the potential to further fan the speculatory flames flagged above.
KRW: USD/KRW 1 Month Can't Break Lower, Despite CNH & JPY Moves
1 month USD/KRW finished Friday's NY session at 1236.60, down slightly for the session. However, despite USD/CNH and USD/JPY breaking lower, the 1 month couldn't trade to fresh lows for the year. Some USD demand is still evident sub 1235 at this stage. USD upticks towards 1245/46 are drawing selling interest though. Note onshore spot ended Friday's session at 1241.35.
- The local data calendar is fairly quiet this week, with just money supply data out tomorrow, then the PPI later in the week.
- This may leave broader risk trends in the driver's seat. To recap, the Kospi ended Friday's session +0.89% higher, just above the 2386 level, with the 200-day MA sitting at 2443.85. offshore investors added +399.2mn to local equities, bringing last week's net inflows to $1384.4mn.
- Tech indices (SOX, MSCI IT) finished higher on Friday, capping off 6 straight sessions of gains. the SOX is above its 200-day MA, the MSCI IT hasn't breached this resistance level in the most recent run higher.
- Elsewhere, the UAE stated it will invest $30bn in South Korean Hydrogen projects.
